The MegaUpload legal circus is beginning to reach WikiLeaks proportions of spectacle. The MPAA petitioned the court yesterday to block MegaUpload's efforts to purchase its servers back from the cash-strapped hosting company, Carpathia on fears that the file sharing service would restart off-shore.

As we reported two weeks ago, server host Carpathia is losing about $9000 a day holding MegaUpload's data and has petitioned the court for financial relief. Specifically Carpathia has asked to be allowed to sell the servers back to MegaUpload—not just the 25 Petabytes of data, the physical servers themselves.

For as big of a deal as the MPAA made about shutting down Megaupload, the trade association is…
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MPAA has counter-petitioned the court to halt this sale. The trade group is afraid that with the physical servers in hand, MegaUpload could move its operation off-shore—beyond US jurisdiction—and to restart operations. In today's filing, the MPAA argued,

A sale or transfer of the servers to Megaupload (or any of the defendants) would raise a significant risk that Megaupload will simply ship the servers, hard drives or other equipment — and all of the infringing content they contain — to a foreign jurisdiction and relaunch the infringing Megaupload service, which would result in untold further infringements of the MPAA members' copyrighted works. If so, the renewed criminal enterprise might be beyond any effective legal remedy.

The trade group also asserted that it owned much of the infringing copyrighted work on the servers and it therefore could not be legally sold. The MPAA said it would not be opposed if the servers were turned over to the Federal government. The MPAA did express "sympathy" for legitimate users and voiced its support for returning user data as long as it isn't copyrighted. [Hollywood Reporter via Ars Technica - Image: The AP]